Directors of NZX listed mobile radio, metro fibre and Internet service provider TeamTalk have rejected Spark’s 80 cents per share offer of 7 February, despite it representing a premium of about 80 percent on the recent share price.
TeamTalk chairman, Roger Sowry, said the price offered did not factor in the significant synergy benefits Spark would gain by taking control of TeamTalk and did not represent fair value for shareholders.
He added: “The terms of the offer contain over 30 separate conditions some of which are entirely outside the control of TeamTalk, so that even if an offer is forthcoming there is no certainty that it will result in a completed transaction.”
Sowry suggested shareholders could a better return if TeamTalk’s businesses were sold off piecemeal, saying the company had received “indicative offer approaches” for parts of TeamTalk during 2016. “These various approaches highlight the strategic nature of TeamTalk’s assets and operations and the potentially higher value which may be available,” Sowry claimed.
TeamTalk said that, based on discussions with other parties, some of these offers might surface at revised valuations. “A sale of parts of TeamTalk could potentially deliver shareholders value significantly in excess of 80 cents per share,” it said.
TeamTalk comprises three operating businesses: TeamTalk (mobile radio services), CityLink (provision of metro fibre services primarily in the Wellington CBD) and Farmside (and internet service provider focused on the rural market).
TeamTalk’s statement to the NZX noted that it had made four senior executive appointments in late 2016:CEO, Andrew Miller, CFO, Jason Bull, and transformation officer, John Fischer.
“They have made significant progress in resetting the strategy and developing a new business plan for TeamTalk,” it said, promising “Their focused initiatives are starting to deliver positive results, which will become more visible during 2017 and beyond.”
TeamTalk said also that it was working with its investment banking advisers Cameron Partners “to consider the value maximising options for shareholders, including an offer for all, or parts, of TeamTalk.”
TeamTalk has also appointed Crengle Shreves & Ratner as its legal adviser “to assist its board in evaluating and responding to any Spark offer and any other proposals that may be forthcoming.”